Hormuz Standoff Drives Global Oil Demand Downward

The International Energy Agency (IEA) is revising its global oil demand forecast downwards due to renewed hostilities in the Middle East and disruptions at key shipping chokepoints.

Control of the Strait of Hormuz has become a central sticking point in efforts to de-escalate hostilities, with global oil supply expected to decline by 4.3 million barrels per day this year, deeper than its previous forecast for a 3.7 million-barrel-a-day drop.

The agency now expects global oil consumption to fall by 1.6 million barrels per day in 2026, compared to its previous forecast for a 1-million-barrel-a-day decline.

Global oil supply rose by 2.4 million barrels per day in July to 101.5 million barrels per day, but remained 6.3 million barrels per day below year-earlier levels.